Research India

Indian Paper Industry

January 2008

Contents

Global Paper Industry Indian Paper Industry
Size & Growth Sub-segment Key Drivers

Key Players Conclusion Appendix
© 2008 Research India ± Confidential
2

The global annual production of paper was 382.0 million tonnes in 2006

Paper and Paperboard Production ± Global Market, 2002-20 (figures in million tonnes)
490.0 382.0 402.0

360.0 321.4 328.1

366.0

2002

2003

2004

2005

2006

2010

2020

Consumption per capital, 2005 vs. 2006 (figures in Kgs)
324.0 312.0 247.0
2005 2006

228.0

106.0 51.0 42.0

22.0
Indonesi a

16.0
P hi l i ppi nes

14.0
Vi et nam

6.57.0
Indi a

‡ The annual global paper and paperboard production was approximately 382.0 million tonnes in 2006. It is expected to increase to 402.0 million tonnes by 2010 and 490.0 million tonnes by 2020. ‡ The global pulp and paper industry consists of about 5000 industrial pulp and paper mills, and an equal number of very small companies. ‡ Broadly, the industry can be classified into two segments: - Paper and paperboard (writing, printing, packaging and tissue). The writing and printing paper market can be further divided into coated and uncoated segments. - Newsprint mainly uses for newspapers, flyers, and other printed material intended for mass distribution ‡ The US is the largest market for paper product and commands high per capita consumption. Asia¶s main markets are China, Japan, India, Malaysia, Singapore and Thailand. - In 2005, Japan had the highest per capita consumption (247 kg), followed by Singapore (228 kg), Malaysia (106 kg), Taiwan (51 kg) China (42 kg), Indonesia (22 kg) and Philippines (16 kg). - India¶s per capita consumption is estimated to be as low as 7.0 kg in 2006.

US A

J apan

S i ngapor e

M al ay si a

Thai l and

Chi na

Source: CEPI; RISI; European recover paper council; ICEM World Paper Conference (November 2005); Research India analysis

© 2008 Research India ± Confidential

3

Latin America in the south and Indonesia in the east are emerged as a fibre supplier with a concurrent decline in the North American pulp industry. in global consumption is estimated to increase to 34% by 2010 from the 32% in 2006. Asia. Source: CEPI.It is expected that Asian market would account for 60% of global incremental production during the period 2004-2020. .Asian region is the largest producer and consumer of paper & paperboard in 2006 Paper and Paperboard Production ± Region wise. Asia emerged as the largest producer and consumer of paper and paperboard in 2006. . the demand for paper and paperboard is increasing at a fast rate i.0 million tonnes Europe 30% North America 27% Rest of the world Latin 2% America 5% Asia 36% Paper and Paperboard Consumption ± Region wise. ‡ The paper and paperboard industry has witnessed a radical shift in last decade.2 million tonnes CEPI Countries 26% North America 26% Rest of the world Latin 3% America 6% Asia 39% ‡ The US is the largest producer and consumer of paper and paperboard in the world.The share of fast developing Asian markets. On a regional basis.The share of mature markets like North America and Europe would fall to around 50% by 2010 from the 52% in 2006. mainly China and India.e. ‡ North America. 8-9%. RISI. . . Research India analysis © 2008 Research India ± Confidential 4 . Europe and Asia dominate the global pulp and paper industry. would emerge as an important market for pulp & paper. excluding Japan. . 2006 (figures in percent) 100% =382. European recover paper council. 2006 (figures in percent) 100% =381.Due to the strong economic growth in both China and India.

Contents Global Paper Industry Indian Paper Industry Size & Growth Sub-segment Key Drivers Key Players Conclusion Appendix © 2008 Research India ± Confidential 5 .

048 ‡ India is the 15th largest paper producer in the world.460 38. .3 million tonnes is closed). due to old technology. the number of paper mills has increased from just 17 mills in 1951 to more than 666 units engaged in the manufacture of paper and paperboard.69. around 666 units are engaged in the production of paper and paper-board Category-wise paper mills in India (figures in number) Category Small Capacity Range Up to 10000 <2000 2000±5000 5000±10000 Medium Large 10000±20000 >20000 Number of units 299 69 107 123 116 70 Capacity (TPA) 12.In India.522 2.93.382 75. Research India analysis © 2008 Research India ± Confidential 6 .0 billion to the government's exchequer. Moreover. ‡ Indian paper mills can be categorised based on the raw materials .880 16. Raw material-wise paper mills in India (figures in number) Wood 32% Recycled Paper 38% Agri-Residue 30% Source: DIPP. agro-residue based mills and wastepaper-based mills.Capacity utilization of the industry is just 79%.980 9. ‡ In last 55 years. Mysore Mills estimates.96.Due to the increasing regulation and raw material prices.wood/forest based mills. out of which nearly 568 are in operation by 2006. 194 mills under the purview of the Board of Industrial and Financial Reconstruction (BIFR) and nearly 60 mills (with a capacity of 1.5 million people and contributes INR25. around 70 % of the total production is based on nonwood raw material. . the companies are increasingly using more non-wood based raw material over the years. In 2006. It provides employment to nearly 1.90. Water and agro industry.17.

the companies also need to rely on imported wood pulp and waste paper.3 0.2 0. ‡ The per capita consumption of paper in India is very low i. Mysore Mills estimates.4 0.Production in India. Production ‡ India is self-sufficient in manufacture of most varieties of paper and paperboards. Indian paper industry is very attractive for the foreign players Paper and Paperboard . 7 Kgs in 2006.Import is mainly related to certain speciality papers such as light weight coated variety of paper.2 0. CIBA. Water and agro industry. the top 10 players control around 60% of the market in term of capacity. ‡ The domestic paper market is dominated by large players owing to their size. 2002-03 2003-04 2004-05 2005-06 Paper and Paperboard . . etc. brand value and financial strength.Due to high growth rate.2 0. cheque paper. 2002-06 (figures in million tonnes) Installed Capacity 7.3 2002-03 2003-04 2004-05 2005-06 * Note: estimated figures Source: DIPP. ¦¥  ¥ . capacity was increased mainly through expansion and modernisation of the existing facilities rather than setting up greenfield projects. 2006-07 2006-07 * ¥  . . CRIS INFAC.e. as compared to an average consumption of 28 Kgs and 58 Kgs in Asia and world respectively. ‡ In last 5 years. 2002-06 (figures in million tonnes) 0. .3 0. . The per capita consumption is expected to increase to 12 Kgs by 2020.3 0.7 . Import Export ¤ £ .Due to the scarcity of raw material. In 2006-07. . ¢ ¢  ¡¥ ¡  7 .2 0.Import-Export. Research India analysis © 2008 Research India ± Confidential ¦¥ .3 0. 7.

0 million tonnes by 2012 and 21.0 million tonnes by 2020. the total demand for paper is around 8.0 2009 10 2014 15 2019 20 arious macro-economic factors like national economic growth. ‡ According to Indian Paper Manufacturers Association (IPMA).3 9. Bilt. According to the Indian Pulp and Paper Technical Association (IPPTA).9 14.Production and Consumption (figures in million tonnes) Production Consumption 21. .0 million tonnes and is expected to grow to 10. ‡ Source: CII.It is expected that paperboard would grow at a faster rate within paper industry Paper & Paperboard .1 million tonnes by 2010-11 due to raw material constraints. Research India analysis © 2008 Research India ± Confidential 8 . ‡ According to ITC¶s estimates.0 8.0 13. it has shown the 1:1 relationship with the GDP growth rate.0 20. promotional expenditure.The growth in paper consumption is directly related to GDP growth in the country.With expected GDP growth of 9-9.0 million tonnes per annum by 2015. the demand for Newsprint and Writing & Printing Paper is expected to grow at the same rate.5%. industrial production. population growth and the government¶s allocations for the educational sector influence the demand for paper . consumption of paper in India is set to double from the current 7. the paper industry is expected to fall short of demand by 1. IPMA. In the past. ‡ Continued availability of raw materials would be a big challenge for the industry in the next 5-10 years.

2 11.1 8.5 8.2 9.2 1.0 1. 2005-20 (figures in million tonnes) 3.1 9.2 Demand 0. Research India analysis Source ± Jaakko Poyry Report 2002 © 2008 Research India ± Confidential 9 ¨§  9 ¨ © ¨§  ¨§ Supply ¨§  ¨§  ¨  ¨§ © .8 5.5 8.2 6.8 4.9 4.3 6. February 19th. 2006 Source: CPPRI. Supply of Newsprint. 2005-20 (figures in million tonnes) 14.Financial Express.9 Demand Supply 12.7 6.6 0.7 2005 2010 2015 2020 2005 2010 2015 2020 Source . Supply of Paper & Paperboard.9 1.0 6.1 9.9 2.9 2.It is estimated that demand would outpace supply Projected Demand.5 2005 2010 2015 2020 2005 2010 2015 2020 Projected Demand.

Contents Global Paper Industry Indian Paper Industry Size & Growth Sub-segment Key Drivers Key Players Appendix © 2008 Research India ± Confidential 10 .

0 5. Indian paper industry is very attractive for the foreign players Newsprint Production in India.000 tonnes.0 750. Thus. 2004 as mills manufacturing newsprint paper ± of which 2 in Central Public Sector.0 million literate people in India are still not reading newspaper.0 670.0 10. The Central Pulp and Paper Research Institute (CPPRI). The production of newsprint in 2006-07 (April-August 2006) was 420. Mysore Mills estimates.4 2002-03 2003-04 2004-05 2005-06 2006-07 * * Note: estimated figures Source: DIPP. arious policy measures have been taken to improve production and availability of newsprint. 2002-06 (figures in µ000 tonnes) 840.0 520. increase in the number of newspaper reader would also increase the demand for newsprint.Import-Export. ‡ The production of newsprint has increased at a CAGR of 12.0 0.  $    #    "    !   Import Export 11 . Research India analysis © 2008 Research India ± Confidential    1 Production ‡ In 2006. 2002-06 (figures in million tonnes) Installed Capacity 1 1 1 1 1 2002-03 2003-04 2004-05 2005-06 2006-07 Newsprint . ‡ The demand for newsprint in the country is met partly from indigenous production and partly by import.There are no price or quantitative controls. ‡ According to the International newspaper marketing association (INMA) estimates that approximately more than 360.0 2.0 3. there were around 77 mills listed in Schedule to the Newsprint Control Order.5% over the last 5 years. Free imports and low customs duty have made newsprint market competitive.. 2 in State Public Sector and 73 in Private Sector.0 680. .Due to high growth rate.

. It includes paper. the demand for copier is also increasing. 2003-07 (figures in µ tonnes) . Research India analysis © 2008 Research India ± Confidential 12 . which are cut in different size. hi-bright accounts .Hi-bright paper segment includes super printing paper. including both hi-bright and low-bright. . for desktop printing and copying.from . 2003-07 (figures in µ tonnes) . NSD and SS Maplitho etc. . .respectively. tonnes in . grew to . . . 2002-03 2003-04 2004-05 2005-06 2006-07 Copier Paper Market.Of the total uncoated paper market. ‡ Uncoated wood free paper market is mainly dominated by the domestic players. 1 1 11 .Uncoated wood-free paper market is primarily dominated by domestic players Uncoated Wood Free Paper Market. ‡ Due to strong economy growth. for % in 21 . All players compete with each other on the basis of cost. tonnes in . It is highly commoditised and competitive segment. 2002-03 2003-04 2004-05 2005-06 2006-07 Source: Bilt. ‡ Uncoated wood free market.and % in . 1 . . .

‡ Creamwove paper is a basic printing paper material. 1. % in 6.Coated wood-free paper is the fastest growing paper segment in India Coated Wood Free Paper Market. The companies are also facing stiff competition and price pressures from imports ± mainly from China and Southeast Asian countries. ‡ Coated paper segment witnessed a shift towards high value and good quality blade coating paper. Within the coated segment . 2003-07 tonnes) (figures in µ . ‡ Coated wood free paper is the fastest growing segment in India. mainly caters to excise book makers. with a growth rate of .. tonnes in the previous year.The two side coated paper market grew by 1 % to 1 . tonnes in . This segment is highly competitive and commoditised. 2003-07 (figures in million tonnes) 1. compared to 6 .. . compared to 1 . 2002-03 2003-04 2004-05 2005-06 2006-07 13 Source: Bilt. % to 6 .The two side coated board market grew by . tonnes in 6. . . . 2002-03 2003-04 2004-05 2005-06 2006-07 Creamwove Paper Market. 1.. Research India analysis © 2008 Research India ± Confidential .6 . 1. tonnes in 6. 1.

20 . Tissue market is at a very nascent stage in India. CRIS Infac.0 2 8. speciality paper segment is expected to grow to 297.Tissue paper segment is at a very nascent stage in India ‡ Specialty paper market has grown at a compound rate of 7. .2% over 2006-07. Research India analysis © 2008 Research India ± Confidential 14 . the demand for tissues is expected to grow at a faster rate.000 tonnes per annum.0 2002-03 2003-04 2004-05 2005-06 2006-07 Source: ICICI direct Research. while that in China is 3. 2003-07 (figures in µ000 tonnes) 277.000 tonnes by 2008.0 . ‡ Tissue paper industry has emerged as a new subsegment within the paper industry in India. . an increase of 7.46% in last 4 years.According to CRIS Infac. Speciality Paper Market.0 239. Due to increasing disposable income.The Indian market for tissue paper is only 30. the consumers are adopting the tissue culture.0 221. Moreover. the entry of new players like BILT would also increase capacity.With the increasing preferences towards hygiene products. due to strong domestic demand.0 million tonnes.

Contents Global Paper Industry Indian Paper Industry Size & Growth Sub-segment Key Drivers Key Players Conclusion Appendix © 2008 Research India ± Confidential 15 .

as compared to global average of 50 Kgs per capita. Trend Low consumption per capita Description ‡ The paper consumption in India is just 7 Kgs per capita.Paper and Paperboard Industry ± Key Drivers Strong Consumer Demand for Packaged goods fueling high growth in Industrial grades of Paper & Boards largely led by growing disposable incomes & Lifestyle changes. ‡ The strong growth in printing industry would also fuel the demand for paper in the future. ‡ Increased rates of literacy and improved school infrastructure would result in greater demand for paper.2% since 1989. © 2008 Research India ± Confidential 16 .1% of total fund) for textbook in 2006-07 Potential Implications ‡ Strong economic growth would fuel the demand for paper and newsprints. ‡ In 2007-08. ‡ It allocated INR6.000 printing presses in India. ‡ Indian printing industry would grow from $12. Potential Implications ‡ The impact of just 1 kg increase in per capita consumption would lead to increase in demand by 1.9 billion in 2011.1 billion in 2006 to $20.1 million tonnes of paper. ‡ The industry would witness a large capital investment both by domestic and international players. the central government has allocated INR106. Increased government focus on education Printing Industry ‡ There are approximately 130. ‡ The government expects that economy would continue to grow at the same pace for the current fiscal 2007-08. Strong economic growth Low consumption per capita Indian Paper Industry Increased government focus on education Printing Industry Trend Strong economic growth Description ‡ Indian economy is growing at more than 8% rate over the last 4 years.7 billion for SSA programme.9 billion (4. ‡ Indian printing and packaging industry is growing at a CAGR of over 16.

education and personal consumers.3 2002-03 2003-04 2004-05 2005-06 2006-07 Indian ± GDP Per Capita (PPP)*. 8. All the sector contributed in GDP growth. services etc. 2003-07 (figures in percent) ‡ Indian economy has grown at a 7-8% rate in last 4 years. 2002-03 % * Note: GDP on a purchasing power parity basis divided by population as of Source: CIA World Factbook. ‡ Due to improving living standard and higher disposable incomes. light weight coated paper. . medical grade coated paper.The demand for upstream market of paper products. Manufacturing and services industry contributed approximately 90% of the growth. is picking up with the growth of economy. 7. 2003-07 (figures in US$) 2003-04 2004-05 2005-06 2006-07 © 2008 Research India ± Confidential 17 .4 4. such as manufacturing.office. like. etc. filter paper. These developments are expected to give strong support to the paper industry. . tea bags. FMCG. ‡ Strong consumer demand for packaged goods is fueling high growth in industrial grades of paper & boards. largely led by growing disposable incomes and lifestyle changes. 9. tissue paper.A strong economy contributes to consumption of papers in all sectors .Strong economic growth Indian ± GDP Growth Rate.. Research India analysis July for the same year 8. the demand for branded high end paper and hygiene paper products has increased in last 3-4 years.

the government allocated INR6.9 2002-03 2003-04 SSA ± Total Expenditure. 172. . Research India analysis 2003-04 2004-05 2005-06 © 2008 Research India ± Confidential 18 ) ' 0 00 ) 0 11 ) 1 0( & ') ' ( 6.9 (4.4 129.7 20. Planning commission. 2003-07 (figures in INR billion) ) ' 4 32 2002-03 Source: Ministry of human resources development.Of total fund available.7 billion for SSA programme. ‡ Indian government started its flagship programme Sarva Shiksha Abhiyan (SSA) in 2001 to achieve the goal of Universalisation of elementary education.4 2004-05 2005-06 2006-07 2006-07 .7% of total fund) and INR6. 2003-07 (figures in INR billion) ‡ The government has increased its focus on education and initiated several central and state-level programmes to increase the literacy rate. .4 67.1% of total fund) for textbook in 2005-06 and 2006-07 respectively. ‡ An increasing expenditure on textbook offers a good opportunity for the companies.In 2007-08.Increased government focus on education SSA ± Total Fund Available.It aims to provide useful and relevant elementary education for all children in the 6 to 14 age group by 2010. the central government has allocated INR106. an equal amount would also be allocated by states government. . moreover.1 billion (4.

the per capita consumption of papers is expected to increase in the future . as compared to global average of 50 Kgs per capita. Supply. as a percentage of GDP.2% in 1983 to 4.Low consumption per capita Paper Per Capita Consumption in India. ‡ With the increasing literacy rate and strong economic growth.1 million tonnes of paper. 2003-07 (figures in Kgs) ‡ India accounts for nearly 15% of the world population. has increased from 1. CRIS Infac.4% in 2003. . Research India analysis Capacity 200 2009 Demand (7Kgs per capita) 2010 F Demand ( Kgs per capita) © 2008 Research India ± Confidential 19 6 6 9B 7B 6DD 9 6 6 @7 AB 6 D E9 Paper ± Demand vs.The paper consumption in India is just 7 Kgs per capital. ICICI direct Research. ‡ The impact of just 1 kg increase in per capita consumption would lead to increase in demand by 1.According to Economic Survey. 6 9@ 6 98 2002-03 2003-04 2004-05 2007 * Estimated figures Source: Earth trends. at a CAGR of 7. 2007-11* (figures in million tonnes) 6 86 7 6 77 8B 6 CB 6 6@ C 77 6 6 @ @A @ 6 85 6 75 6 55 2005-06 2006-07 2011 . it consumes only 1% of the world paper consumption.1%. per capita spending on education.

251 23.792 16.0% 60. 2006-20 (Figures in $ million) Rank Country 2006 20 Growth 2006- G .000 presses.074 19.329 39. Leading Print Markets.Outsourcing Opportunities 1 2 3 4 5 6 7 8 9 10 11 2 US Japan China Germany UK France Italy Canada Spain Brazil Mexico India 182.India would emerge as a global hub for high-quality printing at a competitive cost .6% 10. 0 GG GG ‡ According to Indian Printing. ‡ Massive investments in printing industry spurring Growth at a CAGR of over 14% .136 13.722 88.030 26.0% 12.856 12.3 million people and consists of more than 130.0% ‡ According to Pira International study (2007).200 38.7% 11.7% 15. 3 20.1% 4.550 8.794 34.277 196.731 26. Packaging and Allied Machinery Manufacturers¶ Association (IPAMA) estimates.0% 11.552 12.096 16.934 43.000 17.9% 34.Strong consumer demand for Packaged goods fueling high growth in Industrial grades of Paper and Boards largely led by growing disposable incomes & Lifestyle changes Source: PRIMIR.976 41.0% 52. the printing industry in India provides employment to 1.937 23. the Indian printing industry would grew at more than 70% by 2011. Pira International 2007.363 65.3% 16.8% 73.192 16.000 84. Research India analysis © 2008 Research India ± Confidential 20 HH G G G 2.

Contents Global Paper Industry Indian Paper Industry Size & Growth Sub-segment Key Drivers Key Players Conclusion Appendix © 2008 Research India ± Confidential 21 .

Source: Business World.5 2.9 3. 2007 (figures in µ000 tonnes) BILT Capital Expenditure Plans . II QQ Q QQ Hindustan Paper Corp .5 12.4 0. QV QU I NR Agarwal Group Q I 2 . JK Paper Ltd 2 .2 6.0 12.44 ITC Ltd 2. Company ITC Ltd BILT Capital Expenditure (INR billion) 25.2 Capacity Addition (µ000 tpa) 200 240 200 84 90 180 30 15 75 140 30 55 60 30 20 . 7 . Fitch ratings. . Q QU Q TV I Q TR SK Bangur Group . Q QT I QS Tamil Nadu Newsprint Q V Q QQ QQ II QR I Khanna Paper Mills 5.BILT is the largest player both in term of revenue and installed capacity in 2006-07 Top 0 Paper and Paperboard Producer.5 03.9 0. 7.6 8. 5. Andhra Pradesh Paper Mills Ltd . 25. Printing & writing Industrial grades Newsprint Q I Q TR Q TP Q P Whitefield Paper Mills AP Paper Mills Ltd West Coast Paper Mills Hindustan Newsprint Ltd Hindustan Paper Corp TNPL Century Pulp & Paper Rama Paper Mills Ltd Seshasayee Paper Sirpur Paper Mills Ltd JK Paper Ltd Star Paper Mills Ltd Orient Paper & Industries Total 22 .2 7.5 3. 2 . .9 2.0 8. Company reports and presentation. Research India analysis © 2008 Research India ± Confidential II QP Century Textiles & Industries . 22. 2 .7 3.6 5. 2 . 7 .

BILT is focusing on 4 key areas: . factiva. news article.Creating a de-risked corporate financial and capital structure 23 8 Revenue ± Segment wise.Continuously innovating to introduce new products and grow new markets . with the name of Ballarpur Paper and Straw Board Mills Limited The company changed its name to Ballarpur Industries (BILT) in 1975 BILT is the largest paper manufacturing company in India ‡ The company product portfolio includes .In 2006.coated wood free paper.Securing raw material supply . Research India analysis © 2008 Research India ± Confidential a ` ` X X 2002-0 200 -0 200 -0 W 19 7 20 0 200 -06 W 21 2 20 8 2006-0 W Y Y W W 23 . BILT controlled approximately 21% of Writing and Printing Paper (WPP) market and approximately 5 % of the coated paper market ‡ The company is pursuing both organic and inorganic strategy to increase its installed capacity to 1 0 million tonnes paper by 2010 . copy paper. 2002-06 (Figures in INR billion) ‡ Founded in 1945. uncoated hi-bright paper (Maplitho). the company acquired a paper manufacturing firm. in Malaysia The acquisition not only help the company to secure the future supply but also provide a platform to the company to enter the South-east and east Asian market ‡ To maintains its leadership in the market. Sabah Forest Industries. and speciality & fine paper ‡ In 2006. business stationery. 2006-0 (Figures in percent) 100% =INR 23 8 billion Pulp 12% Paper products & office supplies 10% Others 2% Paper 76% Source: Company reports.Ballarpur Industries Limited (BILT) Revenue.Rapidly developing larger scale of operations .

000 tonnes and a pulp mill of capacity 100.0 86. which is capitalintensive and would focus on the speciality and consumerfocused products business. to a separate company called BILT Graphic Paper Products.0 million tonnes by 2009-10. f dd b f d b 86. With the increase in overall capacity. 2005-06 (Figures in µ000 tonnes) Paper unit Ballarpur Bhigwan Shreegopal Sewa Kamalapuram Ashti State Maharashtra Maharashtra Haryana Orissa Andhra Pradesh Maharashtra Installed capacity 126 125 81 68 -75 © 2008 Research India ± Confidential g e e 2002-0 200 -0 200 -05 cb b 8 . ‡ In July 2007.5 24 . 2002-06 (Figures in µ000 tonnes) ‡ The company operations span across 6 units. 6 .000 tonnes.6 07. After the expansion. to take its current capacity of 480.0 57. etc.0 c c c b b 80. the company would transfer its commodity business. Ballarpur and Kamalapuram.Ballarpur Industries Limited (BILT) Installed Capacity. together with a capacity of 480. 58.000 tonnes in 2006 to around 1. the company expects to double its turnover by 2009-10. 2005-06 b c 06.000 tonnes.000 tonnes manufacturing rayon grade pulp. in the state of Andhra Pradesh (Kamlapuram Unit). By this exercise. while some equipment will be sourced locally from suppliers like L&T. ‡ BILT is also expanding its production capacity in both coated and non-coated paper.6 2006-0 c 80. Installed Capacity ± Paper unit. Germany. the total unit capacity would increase to 315. under which it would transfer 3 manufacturing units at Bhigwan. the company also initiated a restructuring plan. ± The main plant and machinery and its installation would be supplied by oith. which would be transferred to Ballarpur Paper Holdings B (BPH) after court approval. ± In October 2007. the company announced to increase the capacity of its coated wood free paper unit at Bhigwan in Pune by adding 190.

In 2007.ITC Limited ± Paperboards & speciality Papers Revenue. personal care & toiletries. 2006-0 (Figures in percent) 100% =INR213 2 billion Agri-business 17 3% Hotel 4 6% Paper 9 9% FMCG 68 2% * Revenue for Paperboard. . ‡ ITC paper unit exports nearly 15% of the coated papers to customer requirements in Malaysia. ‡ The paperboard. Sri Lanka. covers. UK. . accounted for approximately 10% revenue of the ITC group.000 tonnes of Elemental Chlorine Free pulp capacity at Bhadrachalam mill 21 0 19 0 15 7 11 6 12 5 Revenue ± Segment wise. Australia. UAE. Bangladesh. 2002-06* (Figures in INR billion) ‡ ITC¶s paperboards and specialty paper unit was created after the merger of ITC Bhadrachalam Paperboards Limited with ITC in 2002.It produces both virgin and recycled boards spanning the full requirement of a packaging customer. foods. sleeves. ‡ The company produces paperboards and specialty paper for all types of carton-consuming segments including cigarettes. beverages. it has a 240. The company wants to maintain its leadership in value-added coated boards segment by using latest technology. durables and match shells. Iran. tags and playing cards. ‡ ITC is also looking to integrate its operation fully by creating in-house pulping capacity.ITC also makes some of the premium graphic boards used for greeting cards . Poland and Russia. Paper & Packaging segment © 2008 Research India ± Confidential r q q i i 2002-0 200 -0 200 -0 200 -06 2006-0 h h h p p h h 25 . Italy. pharma. paper & packaging segment is one of main focus area of the company.

2002-06 (Figures in µ000 tonnes) v t uts v t €s 0 0 0 2002-0 200 -0 Installed Capacity ± Paper unit.0 billion for foraying into the coated wood free paper market.000 tonnes annually by April 2008. 200 -06 (Figures in µ000 tonnes) Paper unit Bollaram Bhadrachalam Kovai Tribeni State Andhra Pradesh Andhra Pradesh Tamil Nadu West Bengal 90 10 Installed capacity © 2008 Research India ± Confidential v 0 0 v tuu 0 0 200 -0 200 -06 2006-0 ‡ The company has four manufacturing units: . ‡ In 2007. which gets paper from ITC's other units and adds value like coating and polylaminating. v v t uts w tys v € s v t uts xsu v wsu v tuu 26 .The division is also looking for opportunities to set up a greenfield project at a cost of INR25. either in Madhya Pradesh or Andhra Pradesh. .ITC Limited ± Paperboards & speciality Papers Installed Capacity. .Bhadrachalam unit has 3 board machines and 2 smaller paper machines.000 tonnes of value added paperboards in 2006-07. ‡ ITC's paperboards business has a manufacturing capacity of 352.000 tonnes paperboard machine and 100.000 tonnes per annum and it produced 390.000 tonnes paper machine for manufacturing uncoated paper including branded copier grades. the production capacity of Kovai unit would also increase to 180.90. the company initiated 2 major capacity expansion projects . packaging papers and specialties.Bollaram unit is a value addition plant.000 tonnes of paperboards and 139. .Tribeni plant manufactures cigarette tissues to fine papers. producing coated duplex boards greyback and whiteback made with 100% recycled fibre. .Kovai unit was acquired from BILT in 2004.000 tonnes by October 2008. It has 3 paper machines .The total paper production capacity of the Bhadrachalam plant would go up to 400. It has a single board machine.

000 tonnes It is promoted by the H S Singhania Group ‡ JKPM is the first paper company to get TPM Certification from JIPM. a superior uncoated Writing and Printing paper.JK Copier. the company started to outsource coated paper in 200 Outsourcing and trading contributed approx. ‡ The company has a wide range of branded products in its portfolio. JK Savannah. 2006-0 (Figures in percent) Others 0% Coated and Branded Paper 46% © 2008 Research India ± Confidential … „ „ ‚ ‚ 2002-0 200 -0 200 -0 ƒ  72 73 200 -06 2006-0   ƒ   27 . ± The other major product is JK Maplitho. 2002-06 (Figures in INR billion) ‡ Founded in 1962. Japan and rd paper company in the world ‡ JKPM is the largest producer of branded papers in India The company is a market leader in copier varieties and SS Maplitho segment ± Due to low capacity.500 dealers. JK Copier Plus and JK Easy Copier. JK Paper Mills (JKPM) started its operations with an annual capacity of 18.JK Paper Limited Revenue. ± It sells its products through a nationwide distribution network of approximately 100 distributors and 2. 10% of total sales. It sells approximately 40% of paper produced under various brand names . JK Excel Bond. 93 84 68 Production ± Segment wise. JK Bond.

000 tonnes. Middle East.0 . improved operating efficiencies and higher sales in the copier and coated Paper segments.0 1 0. Malaysia etc. ± The company exports its products to more than 40 countries including Sri Lanka.0 150. Africa. ‡ In 2006-07.0 2002-0 200 -0 200 -05 2005-06 Installed Capacity ± Paper unit.0 ‡ JKPM¶s strategy its to focus on value added product segments and enhance its premium product portfolio.1 1 5. JKPM registered its highest ever sales volumes at 210.0 150. Orissa to enter into coated paper and boards segment in 2005. In line with its strategy. ± It started a 46. ± It commenced commercial production of multilayer duplex board in Gujarat with an annual production capacity of 60.0 172. Bangladesh.000 tonnes in October 2007. 2002-06 (Figures in µ000 tonnes) ˆ‡ 172.0 1 1 0.000 tonnes per year of paper and pulp. owing to high capacity utilisation of 110%. Singapore.5 150.000 tonnes per annum plant in Rayagada. it expanded its value-added cutsize papers and coated varieties portfolio. ‡ JKPM follows its growth plans through capacity addition and its market expansion plans through outsourcing & trading. Australia.JK Paper Limited Installed Capacity. using latest technology. † † 2006-0 28 . 2005-06 (Figures in µ000 tonnes) Paper unit Rayagada (JK Paper Mills) Songadh (Central Pulp Mills) State Orissa Gujarat Installed capacity Paper 125 55 Pulp 127 47 © 2008 Research India ± Confidential † † 1 0. ± The plants currently operate at more than 120% capacity utilisation with an aggregate annual output of over 180.

part of which would be utilized to create additional tissue paper capacity of 20.   29 .0 billion. ‡ In 2007.Orient Paper & Industries Limited Revenue.000 tonnes at paper plant. ± The company plans to hike the capacity of the Amlai paper unit by 50% from the existing 80.6 6. the company raised approx.8 7.5 Revenue ± Segment wise. ‡ The company produces a wide range of writing. 2002-06 (Figures in INR billion) 12. ± Tissue paper is one of the fastest growing segments of paper. industrial and speciality papers. 2006-0 (Figures in percent) 100% =INR8.6 billion Know-How & Service Fees 1% Paper 31% Electric Fans 22% Cement 46% © 2008 Research India ± Confidential ’ ‘ ‘ ‰ ‰ 2002-0 200 -0 200 -0 200 -06 2006-0 ‡ Founded in 1939. INR1. Orient Paper & Industries Limited (Orient Paper) is a part of the CK Birla Group and diversified into Paper. printing. The growth in the use of tissue paper is positive for the company.000 tonnes a year at an investment of INR1.1 8.6 10. It is also a market leader in the domestic tissue paper industry with over 50% market share. The company also announced its plans to enter into CFL business. Cement and Electric Fans.7 billion via a right issue.

It also includes erection supervision. complete stock preparation plant. 2002-06 (Figures in µ000 tonnes) ‡ The company plants is situated in Amlai. ‡ Orient Paper Mills has chosen Toscotec for the supply of a new tissue plant. © 2008 Research India ± Confidential 30 . The company also provided technical and financial aid to Pan African Paper Mills (EA).Orient Paper & Industries Limited Installed Capacity. ± The Modulo 50 tissue machine would be equipped with single layer headbox. 76 76 76 76 76 2002-03 2003-04 2004-05 2005-06 2006-07 Installed Capacity ± Paper unit. 2005-06 (Figures in µ000 tonnes) Paper unit Amlai Brajrajnagar State Madhya Pradesh Orissa Installed capacity 76 85 Note: The operations of the Brajrajnagar plants have been suspended since . to set up a pulp and paper mill in Kenya. Madhya Pradesh with an annual capacity of 76. Main delivery is scheduled by June 2008. The plant will be installed in Amlai.000 tonnes. high efficiency steam heated hood and integrated steam distribution plant. a slitter rewinder. India and will have an overall capacity of 59 tons/day. Machinery has also been sold off. crescent former section. and start-up is scheduled for end of 2008.C. ± The project involves a full turn-key installation including Modulo tissue machine. single press section and a 15ft Steel Yankee Dryer ± Site erection would be completed between April to November 2008. vacuum plant. distributed control system. commissioning. A. Majority of the employees of this plant have opted for VRS. start-up and training. approach flow system. all tissue machine accessories. drive and the complete electrical plant.

Contents Global Paper Industry Indian Paper Industry Size & Growth Sub-segment Key Drivers Key Players Conclusion Appendix © 2008 Research India ± Confidential 31 .

focusing on: ±Improving the operational efficiencies through rightsizing pulping capacities ±Brown-field capacity expansions ±Backward integration into captive power ±Adherence to pollution norms by chemical recovery ‡ The paper industry would witness an investment worth INR100. The top 10 domestic players in paper sector would account for around 70% of the capex planned to be implemented between 2007-09.0 billion capex in next 2-3 years. ‡ Metso Corporation must tap the opportunities available in the Indian paper industry.Conclusion ‡ Indian paper industry is currently in the midst of a transformation with major capital expenditure (capex) underway and improving operating efficiencies is the major concern of the all players. but the company should also tap the medium and small players for expansion in India. All players are committing a large amount of investment. © 2008 Research India ± Confidential 32 . Although big players form the considerable market share.

Contents Global Paper Industry Indian Paper Industry Size & Growth Sub-segment Key Drivers Key Players Conclusion Appendix © 2008 Research India ± Confidential 33 .

0 (figures in µ000 tonnes) 410 0 3 00 3 00 280 0 240 0 260 0 300 0 101 0 113 0 127 0 142 0 159 0 Coated crome paper Art paper Art boards Source: CPPRI.Paper ± Demand Forecast Variety-wise Uncoated Paper. 2004.0 (figures in µ000 tonnes) 350 0 • ” • ” – — • ” • ” ” ” • – ” • – ” • – “ ” • – ” “ – ” 2004 05 2005 06 2006 07 2007 08 2008 09 2009 10 004 05 2005 06 “ 18 2006 07 “ 20 2007 08 “ 21 2008 09 “ “ ˜ “ “ “ 12 22 2009 10 “ “ 12 “ 13 “ 13 “ “ “ “ “ 06 12 24 “ 06 13 26 “ “ “ 07 03 03 “ “ 07 “ “ 01 07 03 03 “ “ 01 34 03 03 “ “ “ “ “ 19 “ “ 02 36 03 03 “ “ 20 “ “ 21 02 38 41 03 03 14 “ “ “ 22 23 4 02 Industrial Paper. 2004.0 (figures in million tonnes) 43 46 03 03 “ — “ “ ” – ” “ “ . Research India analysis © 2008 Research India ± Confidential • ” • ” • ” • ” ” 2004 05 2005 06 2006 07 2007 08 2008 09 2009 10 1 1 1900 Kraft 1 2 1900 1 3/1900 Duplex 34 ™ ™ ™ ™ ™ “ “ 114 0 “ 123 0 “ 133 0 “ 143 0 154 0 166 0 “ 80 0 85 0 90 0 177 0 – “ “ “ “ 290 0 – 96 0 – “ 350 0 102 0 1/4/1900 Grey and white board – “ 380 0 109 0 1/5/1900 1/6/1900 MG Poster – 460 0 Speciality Paper. 2004.0 (figures in million tonnes) 02 06 10 14 15 10 11 Craemwove Malitho (including unbranded copier) Branded copier Kraft Duplex Grey and white board MG Poster Coated Paper. 2004.

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